Early investors in NFT gaming DeFi project Eminence Finance lost around $15 million of their investments following a hack.
The ecosystems DeFi They are the frenzy of the moment. Investors and decentralized finance enthusiasts place surprising investments in projects of this kind, which promise incredible returns even when they are not completely finished. This is the case of Eminence Finance, a DeFi project created by Andrew Cronje, the developer of the famous protocol Year Finance, which ended in failure after the hack that allowed investors to lose $15 million.
Eminence, which was not completely finished, was published openly on Twitter since September 28, and knowing the successful trajectory of Yearn Finance, investors decided to deposit their funds within the project, even without knowing how this worked. The high expectations generated by Eminence led enthusiasts to invest a total of 15 million dollars, with the idea of perceiving incredible profits generated by the project.
However, as explained its developer, the project was incomplete, although the business concept and the Smart contract of Eminence were ready, so they promoted the project under the figure of “test production” so that third parties could interact with it. Thus, three weeks after its official launch, hackers exploited a security vulnerability present in Eminence, which allowed them to extract investors' funds.
The hackers' feat was simple, as Cronje indicates in his tweet. Hackers reviewed the Eminence smart contract and found a vulnerability, which allowed them to mint an unlimited number of EMN tokens, burn an equal number of tokens against another cryptocurrency and then sell that same amount of cryptocurrencies for EMN tokens.
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Flash Loan Attack
Eminence Finance is an NTF gaming DeFi protocol that was promoted solely through Twitter. There were actually no official announcements or statements on the protocol's website explaining anything about the new project; simply some tweets from its developer Cronje, on his Twitter account. But that alone was enough for many investors to look for the project contract and start investing in it, hoping to be the first to enter Eminence and receive all the possible benefits.
crown explains who published the first clan of Eminence, Spartans, and he went to sleep. Then, around 3 a.m., she received messages saying that the project had $15 million and that hackers had exploited a vulnerability, taking the money.
The vulnerability gave hackers the opportunity to use a flash loan (flash loan) to drain all of Eminence's funds in less than 3 hours, multiply your profits and return part of the funds to your developer.
$8 million returned
In the same tweet, Cronje explains that the hackers later returned $8 million of the stolen dollars to an account he owned at yEarn.
“8 million were sent to my yearn:deployer account.”
The surprising return of more than 50% of the stolen funds is causing great controversy in the crypto community, and of course, among the project's investors. Cronje stated that the funds that were in his account would be deposited back into Eminence's treasury, to be returned to investors affected by the theft. The money is now in a wallet multi-signature from Yearn Finance, where they remain safe until they are returned to investors.
Consequences of hacking
Since the Eminence hack, the value of Yearn Finance's YFI tokens, which was close to $29.000 USD, has fallen by more than 15%; and in the last 24 hours, YFI reflects another fall of 7,61%. With the news, several of the token holders have sold their holdings, stating that they have lost faith in Yearn Finance and Cronje. Many investors consider it a lack of responsibility on the part of the developer and “serious negligence” to have published the project without being completed or having due security; The exploit would have been avoided if only the project had not been released ahead of time.
Alex, a YFI user, points out that he sold his YFI tokens to protect his profits, since what happened with EMN represents serious negligence, which in his opinion, could lead YFI to collapse. For his part, Cronje noted that he will continue the development of Eminence on the mainnet of the Ethereum. The value current EMN token price is $0 USD.
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